As I understand it, the original actor was unavaiable. Since this meant recasting they decided "let's make his new appearance part of the plot," and he ended up as a child.

Fun fact, General Hammond's cameo was originally written for General John Jumper, who was at the time the real-life US Air Force Chief of Staff (and had previously appeared in Lost City). General Jumper had to back out at the last minute, and therefore the scene was given to Hammond instead.

I'll put it in spoilers just in case....

Is that the last time we see him?

Depends. No, The Fourth Horseman two parter is not the last time we see General Hammond in the series, but it is the last time we see "Hammond Prime" to use Star Trek terminology. Hammond's next appearance, in 200 he appears in the Thunderbirds style puppet sequence and The Road Not Taken and Continuum feature Hammond in alternate reality/timeline.